Matt Yglesias brought my attention to some important but unsurprising recent data, Americans Are Making a Big Mistake About Healthcare. That mistake is that, overwhelmingly, they don’t think that the government subsidizes their healthcare. Overall, roughly 15% of Americans admit to getting their healthcare subsidized. I’ll get to why that is wrong in a moment, but first I want to point out the one thing in the poll that did shock me: only 7% of Americans over the age of 65 thought that they had their healthcare subsidized. How do you spell “Medicare”? D-E-L-U-S-I-O-N.
I suspect that this is due to the fact that people think they have “earned” their Social Security and Medicare. This is not true. You could just as easily say that everything that ever comes from the government has been earned because the people pay taxes and the government provides benefits to those who qualify. Of course, this is not what seniors mean they claim to have earned their Medicare. Almost to a person, the amount of money paid in isn’t even close to the amount paid out.
But these seniors who are convinced that the government ain’t given them free medical care are the ones most likely to vote for conservative candidates who want to cut welfare. So this Medicare delusion is serious business. But of course, it isn’t limited to this. There are all kinds of ways that the government gives out welfare. And the government does it in such a way that the richer you are, the less likely you are to see it as welfare. I discussed this a couple of years ago in an article, Hidden Welfare for the Rich. My favorite example is the mortgage interest deduction, which almost no one thinks of as welfare, but which clearly is. (Read the article!)
Yglesias explained in his article why it is that almost everyone has their healthcare subsidized. It is for pretty much the same reason that the mortgage interest deduction is welfare. Before Obamacare, you generally got your insurance from one of two places: government (Medicare, Medicare, VA) or employer. Clearly, getting it from the government is getting subsidized healthcare. But getting it from an employer is also getting subsidized healthcare. Your insurance is part of your compensation. But you don’t have to pay taxes on it. Thus: a subsidy! What Obamacare does in the healthcare exchanges is to provide people who don’t get their insurance through an employer the same benefit the government has long been giving to people who do get their insurance through an employer.
Ouch! Suddenly all those people complaining about freeloaders just sound like a bunch of privileged jackasses who have no idea that they too are freeloaders. That reminds me of something…
In the late 1970s, someone thought it was a good idea to turn The Paper Chase into a television series. (Actually, it isn’t a bad idea; but I don’t think it was well executed — at least during the first season.) In one episode, Hart was tutoring an African American woman. And he had a real attitude about it because, you know, Affirmative Action. So Kingsfield had him do a paper or something that caused Hart to have to read the Affirmative Action clause of Harvard, and Hart learned that he too might have been helped by the program because of growing up on a farm. And Hart improved his attitude in the way that only an hour long television drama can.
Unfortunately, all those Fox News watching freeloaders are never going to have their “road to Damascus” moment. They will remain convinced that welfare is just something that those people get. The good conservatives deserve everything that they get. This continues to be a huge problem in this country. The modern world is unbelievably complicated. We are all interconnected. But we have set up systems that allow the rich to pretend that they have done it all themselves and forces the poor to think that they are dependent — and that they are alone in their dependence. This is a delusion that we can ill afford.